Plastic cards carrying magnetic stripes are widely used as credit cards, debit cards, automatic teller machine (ATM) cards, telephone payment cards, etc. It is believed that billions of these cards are used throughout the world.
Typically, these cards hold approximately 200 to 800 alphanumeric characters, which is the same as 200 to 800 bytes of data in computer language. The magnetic stripe is erasable and is read and written by a wide variety of commercial devices.
A variety of methods are used to enhance the security of such cards and to discourage fraudulent use. Holograms are affixed to the cards to make card counterfeiting more difficult. Color face photographs of the registered card owner are affixed to the card for confirmation that the possessor of the card is the rightful owner. Personal identification numbers (PIN) are memorized by the card owner and entered into terminals such as bank automatic teller machine (ATM) terminals to prove card ownership prior to cash payments to the card possessor.
In U.S. Pat. No. 4,683,371, Drexler teaches a dual strip card having both prerecorded data on a non-erasable strip and temporary data on a spaced apart, erasable strip.
In U.S. Pat. Nos. 4,879,747 and 4,995,081, Leighton et al. teach a method and system of encoding a password into a digital signature. The password may include a digitized photograph of the authorized cardholder which may be displayed at the transaction terminal.
U.S. Pat. No. 4,961,229 to Takahashi teaches a speech recognition system utilizing an IC card, and IC card reader, a microphone, and analyzer and a collating circuit, which are used together for identification of a person.
U.S. Pat. No. 4,993,068 to Piosenka et al. discloses a system for identifying users at remote access sites that encrypts physical characteristics of a user and stores the encrypted information in a computer, and then compares information received from a person requesting access at a remote site with that of the user to determine whether to allow access.
In U.S. Pat. No. 5,053,608, Senanayake discloses a personal identification system in which a user's fingerprint is recorded in encoded form permanently on an identification card and also temporarily in one of the secretly designated areas known only to the card holder and reader. This permanently encoded fingerprint is then compared with that of a fingerprint temporarily recorded at the time of use in one of the designated areas.
Finally, in U.S. Pat. No. 5,259,025, Monroe et al. teach a method of verifying the personal identity of an individual at a remote location by comparing video information received at the remote location with that previously recorded and stored at a central location.
In spite of all the anti-fraud methods currently used for obtaining credit, receiving cash, receiving miscellaneous benefits, etc., fraudulent use of magnetic stripe cards results in losses estimated at from many hundreds of millions of dollars to billions of dollars annually. The fraudulent methods involve a variety of techniques. Magnetic stripe cards are stolen. Lost cards are found and used. Cards are counterfeited. A person may apply for and have cards issued in the names of unsuspecting credit-worthy individuals. PIN numbers may be obtained by observing an ATM user entering his number or finding a PIN number noted in a lost or stolen wallet.
It is a current trend for welfare benefits to be paid out by electronic means. A number of states, including New Jersey, Maryland, and Minnesota, have adopted Electronic Benefit Transfer (EBT) programs, and many other states are considering EBT systems. The Health Security Act being proposed by the President and by some in Congress advocates the use of a plastic identification card which could evolve as a magnetic stripe card for health care providers to obtain payment from the health insurance alliances. Also, Vice President Al Gore's National Performance Review recently recommended adopting electronic systems for making government payments.
In the state of Minnesota, EBT programs are expected to include Aid to Families with Dependent Children (AFDC), General Assistance (GA), Family General Assistance (FGA), Work Readiness (WR), Emergency Assistance (EA), Emergency General Assistance (EGA), Minnesota Supplemental Aid (MSA), Emergency Minnesota Supplemental Aid (EMSA), Food Stamps and $50 Child Support Bonus. Minnesota is also studying potential applications for EBT technology that have been considered in other states or at the federal level, which include Social Security, Supplemental Security Income (SSI), Unemployment Benefits, Low Income Energy Assistance Program, Job Training Partnership Act, Worker's Compensation, State Employment Retirement Programs and Payroll Services. Other government services studied by Minnesota for future inclusion in systems related EBT Technology include drivers licenses, voter registration, cross country ski licenses, hunting/fishing/boating licenses, campsite reservations, motor vehicle registration renewals, jury selection, motor vehicle title information, auto insurance, law enforcement usage, donor blood/tissue type and benefit status for federal and state programs. It would be possible, but very expensive and cumbersome, for Minnesota to issue individual data cards for each of the applications and functions described herein.